Focus 580; Casino Moscow: A Tale of Greed and Adventure on Capitalisms Wildest Frontier

In this part of focus 580 we'll be talking with Matthew Brzezinski. He was staff writer for The Wall Street Journal in Kiev and Moscow from 1996 through one thousand ninety eight. Before that he reported from Poland and other Eastern European countries for a number of publications including The New York Times The Economist The Guardian and the Toronto Globe and Mail. He is currently a freelance writer. His work has most recently appeared in The New York Times Magazine his home is now in Washington D.C. this morning we'll be talking about a book that he's written that's based on his experiences in Russia in that period 92 96 through 1980 when the country was rushing headlong into capitalist market economy the title of his book is Casino Moscow and the subtitle A Tale of greed and adventure on capitalism his wildest frontier. It's published by the Free Press in which he tells some rather remarkable stories of his experiences during that time that is seems to be something of a combination of what happened in this country on Wall Street in the 80s with just a dash of

Chicago in the 20s. We'll have more as we talk with Matthew Brzezinski and as we do of course as always questions are welcome. Maybe you'd like to call in. Share with your with us your thoughts. Make common test questions that's certainly fine. All we ask callers is people just try to be brief so we can get in as many people as want to be a part of the show. Keep things moving but anyone is welcome to call the number here in Champaign Urbana 3 3 3 9 4 5 5. We do also have a toll free line that means if it would be a long distance call for you. You're in Chicago southern Illinois western Indiana any place the signal will travel. Use that number 800 to 2 2 9 4 5 5 again 3 3 3 W I L L and toll free 800 1:58 W while Mr. Brzezinski Hello. Thank you folks. Thanks for talking with us Mark Martin we appreciate it. You apparently had before you went to have this this stent writing for The Journal in 96. You had been in Russia at at least

one time before you mention the fact that you had been there I think in. Two it was the first time I'd been in Russia. OK I had gone on several more occasions and traveled throughout some of the other former republics such as Belarus and Ukraine. I guess what I'm interested in is maybe talking you're talking a little bit about how what the differences were in what you saw when you were first there in 1982 and then how things had changed when you went back there in 1996. Yes incredibly stark night and day. I remember when getting off getting off the train and Moscow in 1992 and it was already evening and all the lights at all the streetlights had had burnt out and hadn't been replaced and there was such a cool room about the place. When you walked around storefronts there was nothing. Dust in the windows they had you know maybe 10 or 15 year old cans and things that they were

displaying but no virtually no goods. When you looked at the people they they were these you know these plastic shoes with velcro straps and these you know grade re on pants and shirts and I was I was struck that you know that this this place which looked like it had just suffered through a war I just had just a year before that been considered a superpower and I knew and had inspired fear and I guess in the West and in the United States it was it was really really shocking I am I said boy you know they this was this was a heck of a fraud if we were we were frightened of these guys they look like a bunch of beggars. And then what happened when you went back in 1996 what it sounds like it was so stunning was just how different things were and how many people seemed to have money and lots of money and enjoy spending it and maybe even enjoy almost throwing it away. Oh I mean it was it was literally like stepping into the Las Vegas strip

where. The Russians had strong neon just about everywhere in Moscow to add splashes of color to this. That would have been such a great place before and I remember coming in I had come in I was a big snowstorms in the middle of winter and it seemed that every second car I saw was it was a Mercedes and not just any Mercedes but the biggest most expensive Mercedes or BMW or Audi and indeed you know Russian consumers who had been denied everything for so long. All of a sudden weren't denying themselves anything. And this was a place where Europe they had these storefronts which before had had nothing but old old tin cans were or were now displaying you know solid gold bathroom fixture fixtures and. And new stereo systems ad and sable and mink coats. And it really it really was an incredible contrast in those short five short years.

I like when you're talking about. No only how really people spend money but how in fact people seem to like paying too much for things like that you tell a joke at one point or there's a joke about them we get one guy who comes up to the other guy on the street and he says How do you like my new Hermes tie right. I just bought this in Paris I paid $900 and the other guys as usual you could have gotten the same tide on the street for fifteen hundred. Oh yeah I did. You know in Russia. It's not it's it's not surprising. If this was you know the I guess the the new rich or the newly money there are kind of an interesting breed all over the world. And in a place like Russia everyone had been poor and all of a sudden this country with with tremendous and vast natural resources. And the place is dripping in oil it has almost as much oil as Saudi Arabia. Almost as many diamonds and gold as as South Africa and all of a sudden this which had belonged to no one because it belonged to the state was up for grabs. And if you were if you were clever strong

you could you could grab this. And people did and almost overnight people through one way or another had bribed somebody and managed to export say you know a few trainloads of oil or coal and had 30 or 40 million dollars deposited in their Austrian or Swiss bank accounts. And they they pretty much went crazy with this with with this money and and it and they weren't very sophisticated shoppers. So the way they judged quality was by the price tag and interestingly enough a lot of American companies exploited this particularly that I can think of one. One interesting example is Philip Morris which which in the United States. This sells and markets brand of cigarettes that sort of a knock down brand of cigarettes and mostly students university smoke it is called Parliament. Somebody was very clever in Russia and they essentially doubled or even tripled the price of the cigarettes

and all of a sudden the cigarettes became the brand of the new Russians the new rich and they were a runaway success. And little did these new millionaires know that they were smoking the exact same cigarettes that that you know that impoverished students in America smoke and they thought that this that the cigarettes were the highest quality you could get and there are many others examples and I think they're no example you give us someone that you knew or maybe was just a restaurant that you were familiar with where the you know the guy who ran the place had bought some Spanish wine and it really wasn't very good and nobody was interested in drinking it until he tripled the price and then suddenly people couldn't get enough. And this this happened this happened all right. All all over the place with all sorts of crazy products. That that that you know very clever Westerners were unloading on on on these very unsophisticated consumers. It's it's changing a little bit in that the new Russians of now you know had a decade of exposure to two Western goods and Western culture because

it was the same thing with Western culture. Any any TV show any film any magazine this long as it was America was seen to be the be and end all. And of course there were you know we produce a very good sensible produce of incredible junk and that was all being shipped out there. But because in the in the old Soviet days you know the set all that off limits and you could go to jail for bringing in you know even something as innocuous as Time magazine or or Playboy You know when when when the Russians got their hands on this they they they they you know they thought that they had they'd won the lottery and it was. And they. It's good to distinguish between what was good and what was back. Our guest in this part of focus 580 Matthew Brzezinski. He is currently a freelance writer. But between 1906 in 1988 he was a staff writer for The Wall Street Journal in Kiev and Moscow and before that he reported from Poland and other Eastern European countries for a variety of publications including The New York Times The Economist The Toronto Globe and Mail is the new book is Casino Moscow a tale of greed

and adventure on capitalisms wildest frontier it's published by the free press and it's based on his experiences what he saw during that time in the late 90s in Russia. Questions welcome 3 3 3 9 4 5 5 toll free 800 to 2 2 9 4 5 5. Well certainly one thing it's true is that everyone wasn't getting rich who who indeed was it that was benefiting by this. This shocking economic. Change largely to groups of gangsters and government officials or former government officials in the Soviet system was a gigantic bureaucracy and like any bureaucracy if you knew decision makers you would get a lot of things done. And in 91 some of the some of the more clever bureaucrats decided that well we have been in towards all these natural resources or semi-finished goods and we will essentially

privatized them for ourselves. And so it was not surprising to see you know often deputy Deputy Prime Minister as all our people high up in the ministries that almost overnight became multi multimillionaires because they they effectively just stole the state's property. And in Russians this is called Truvada you have Hero which is kind of a play off words meaning grab ocracy And of course theres the other the other category is the gangsters. And this also ironically to is has its roots in the Soviet system in that you know that. The Communist Party was essentially the world's largest Matthew organization and its enforced its stand power by using foot by using intimidation and fear. And so they were cheering that the late 1980s when there was their perestroika under Gorbachev and of course in the early 90s. This was this was the way of getting anything done was was to intimidate and to

threaten. And you often had to sort of sports clubs with wrestlers and boxers turn themselves into into business quote unquote associations. And they want to around terrorizing the neighborhood and demanding protection money and buying off policemen and politicians and very many of these these petty thugs became extraordinarily wealthy and then set their sights on on on not just ripping off the little corner store but taking over you know aluminum factories oil refineries and many of them pulled it off and some of these some of these folks became you know worth hundreds and hundreds of millions of dollars and and they employed private armies that sometimes were a thousand you know a thousand strong and they almost ran little States within the states. And to some extent although less so that this continues today. Well one wonders when you read stories like this where there are all of the new Russians.

The new ridge the people who managed to profit greatly by the change in the economy and the privatization of former state owned enterprises. That all the people who got rich. Where the. Was this all done illegally. Were there any people that were just really you would say really smart and ambitious and made the system work or in some way or another was this really all the result of lawbreaking. If you there's of course there were people who tried to do it legally but in a place like Russia you cannot do things legally because the laws at the time. So I took time all the sudden every was told be a capitalist and you have all the laws of the Soviet system which had not yet been rewritten. Were laws that were intended to counteract capitalism carob beings. Being a businessman during the Soviet era was being a criminal. It was illegal. And so. To become a business meant since the laws have not been rewritten you

often have to violate the law and the moment you violated one law or venue and you know that immediately you've exposed yourself to attacks to leave or the Ministry of the interior and which meant that you had to either bribe people or sort of work in the shadow economy to do your business off the books. And as I was told by by dozens and dozens of businessmen you know that yes we would love to do everything above board operate legally but if we did we would effectively go bankrupt because the tax rates for instance were 110 percent. So you'd be working for and you'd be giving it everything over to the government and the government just didn't didn't change the laws and by the time it started changing the laws well that the whole you know the whole system had been had of corruption had been had been ingrained and you know that the corruption literally ran from the very very very very top. It's not. It's not a coincidence that President Putin's first act

when when he took over the reins from from President Yeltsin on New Year's Eve of 1999 was to all for Yeltsin and his and his family immunity from prosecution. And this corruption ran all the way down to the very pettiest of bureaucrats or the the poor the underpaid policeman who earn a living have to have to give out in all sorts of tickets and would pull you over and then be very creative and get a ticket once for an improperly storage toolkits and other officials would I have had a colleague whose grandfather passed away and he was not one of the new rich in Moscow and he needed to to cremate him. The government officials wanted an $800 quote unquote facilitation fee to get the permit to create him to cremate him and they couldn't they couldn't. This family was not well off and they couldn't come up with the money and it was winter. So that's the grandfather out on the balcony for three months while they scrounged up the money to cremate him I mean this is a this is

a very morbid example but it sort of tells you that you know it's very difficult to try to do anything legally in a society that that is in that where corruption is deeply ingrained as it was in Russia and continues to be. Well I mentioned that before this meeting this this time in Russia. That you had been in Poland and other places in Eastern Europe in a sense covered the same kind of story and yet the story played itself out very differently. Why is it for example that the experiences of the economic change in Poland was so different from the experience in Russia. Well there's a there are a great a great many reasons. One would be that unlike Russia places like Poland or the Czech Republic or Hungary under the communist era had had dissident movements and solidarity for instance and Poland during the 80s as I'm sure you will remember was was was a hugely influential opposition

movement which counted a member in just about every every family. And so in 1989 when when communism was toppled in places like Poland and and the rest of Central Europe you had people like Rick Ross. That's not how people who come to power and many of the communists were. Are thrown out of government whereas in Russian in Russia and other parts of the Soviet Union the very same people who ran the show in the old days continue to run the show as they ran it for profit for themselves later on. And of course in places like Poland and and and Hungary and the Czech Republic and the Baltic states these these countries had enjoyed western influences and they were much more European and they were very desperate to become part of the West. And whereas Russia was never so convinced that it wanted to be part of the West it liked a lot of the West's gadgets like some of the cars we drive in the cell phones we use. But some of the ideas that we have ideas that government is for the people and not the other

way around. THIS THIS THIS. They were always a little skeptical of and in Poland and Central Europe that the politicians really did make the very difficult and painful decisions to push through the difficult reforms that were necessary to use to introduce Western's truly Western style economies where there is there is rule of law where where the politicians are accountable and you know the effects are or were seen very very quickly. We are getting close to the midpoint of the conversation. And again unlike people who are listening you questions or comments you call in 3 3 3 9 4 5 5 toll free 800 to 2. 9 4 5 5 against Matthew Brzezinski and the book is Casino Moscow it's published by the Free Press. Based upon his experiences there some of what he saw from nine thousand nine hundred sixty one thousand ninety eight when he was writing for The Wall Street Journal. I'm curious about how it is you ended up getting

that the job with the journal. You don't believe that you were particularly if you didn't economic reporting for you business writing wasn't particularly a specialty and yet this was in large part a business story or at least you were covering a big economic story. How did you end up getting this job. Well I had I had worked in and Poland and during during the first half of the 1990s and much of that the story sort of died in Poland and I pointed out it was a success it was already people were talking about joining NATO and joining the euro you know European Union and they were stability and the economy was growing and in and journalism where prosperity is often wipes off the front the front page sort of speak. But of course this was just beginning. And the former Soviet Union and the opportunities were really in covering and covering business. Doesn't that necessarily that worried about it not knowing that much about business because I

was going to a part of the world where nobody knew anything about business. And I remember my first assault one of my first assignments was to go to the Ukrainian Stock Exchange and I was very aware they had just started it and it was extremely hard to find there was no not even not even any plaques or addresses and when I walked in the building there was there was a bubble on a kerchief and a broom sweeping and I said Well is this the stock exchange and said Well I think they do something with money upstairs and I'm not sure and I went up there and there was there was there was a dozen or so traders sort of slumbering at their desks and not much was happening and I introduced myself to the chairman of the stock exchange and I said that I was from The Wall Street Journal and he said the world Street Journal what country do you represent. First of all no Wall Street and it's in New York in many ways. Oh I see. And I just sort of ask him the very sort of basic questions that I had I had I had asked my colleagues that you know that one of the basic questions you ask any stock market one of them is what is what is it what is your market capitalization or is what size is the size of the stock market. And of course nobody over there

knew what the term market capitalization was and nobody had any idea what price to earnings ratios were. So you know it did make me feel better that I was covering people who did not know that I that I was not a seasoned financial reporter because everything was brand new and and in a sense you would have better training being a crime beat reporter and covering business in that part of the world than actually having having worked on Wall Street because you worked on Wall Street and went over there you would see the day that you know banks in that part of the world for instance don't lend money and they're called banks. But they're they have nothing to do with the banking system as we know it and the capitalism that existed over there was I think more represented repertoire a reminiscence of the capitalism that we had here maybe a hundred years ago during the great robber baron era and you're ensuring that the late industrial age we have a caller to talk with others are welcome. Let's go here to Herb for line number. On line number one. Hello.

Yeah there is that the good opportunity to check a weekly out of Boston called the Boston Phoenix. Last year ran an article called From Russia with Watts. It was about two kids from the Boston market games in that tell you be right they run the exile and you have much too much truck with them while you were there. We we did our best to to give them as wide berth as possible I think they're they they write a very sort of salacious weekly or biweekly it kind of depends on their relative sobriety and finances. I'm actually very smart and and intelligent and I think they have a they tend to sort of poke fun of mainstream journalism and sort of play up with the the more salacious side of. Moscow a name they call Moscow Babylon and and I think you know in a lot of things they say they're absolutely right and Moscow

is a city where anything goes where anybody can be bought where there are no rules. And if if you're if you're a moneyed young bachelor Moscow is indeed a very very interesting place to be in the some of the things that that they chronicle. Yeah. The Particularly you lament the fact that nobody told them how beautiful Russian girls are but let me let me read a couple paragraphs about something that they wrote. You get your comments. One of the they were interviewing have for the Boston Phoenix. They were interviewed for The Boston Phoenix and they were asked to talk a little bit about American business interests to Russia. And they said the American big business wants Russian natural resources Russia has a third of the world's natural gas. Tons of platinum gold and diamonds. In an ideal situation the evil American corporations would want it to be a two less Banana Republic and basically that's exactly what it's become after the reforms were dictated than Matt says.

One thing that's under-reported is the phenomenon of Western companies buying stakes in Russian military factories that then stop producing semen for instance. Bought a stake in a submarine factory. Now it doesn't produce anymore but all of a sudden and Brad and Whitney all those military industrial complex companies are all over Russia. Sure but what would you what would you prefer having the Soviet Union with thousands of nuclear warheads pointed at us or a toothless Russia that supplies cheap oil. I think they are and they're absolutely right that that in the middle the disarmament programs and I've been to nuclear submarine factories shipyards I've been to the place where they made the SS One thousands in the SS 24 which are the ICBMs they teach you know the missiles that carried each carry 10 warheads. And it's true there are there are. Consider all those

places and they're giving them civilian contracts. And one of the reasons this is being done is the last thing you want is a great many of those of those scientists that worked in these places being all of a sudden unemployed and bitter and then receiving an offer to go work in a place like Iraq or Iraq boy are a couple of Americans who disagree 100 degrees with you or think that the only reason that we're going in. I mean the primary reason for going in there buying up factories and shutting them down is that we just want the natural resources that we consider Russia big Brad back a basket for us and it's a great opportunity for us to go in there and rape the country basically. Or the Russians or our. Are smarter than we think in that they're not letting us have the natural resources. Jaren journeying the big bubble when you could buy stocks in just about anything you could not. And Tim to the great frustration of you know the axons in the mobile phone and then the

text cause you could not get in there and get oil. The Russians kept the oil they keep the diamonds they keep the natural resources the platinum and and and and so on and so forth they keep that for themselves. You know in terms of in terms of in terms of disarming Russia I'm all for it and I think that that the Clinton administration has come under a lot of heat for sort of turning a blind eye to the corruption that existed in that part of the world. But I think that they successfully did demilitarize large segments of the of their industry and you know own a wounded bear is a very dangerous affair. And Russia's been humiliated and Russia is angry and he western sentiments are growing there I was just in Moscow last month into a couple stories in The New York Times Magazine and even even amongst the liberal intellectuals there was a lot of anger at the West. And I think that the less potential they have for wreaking havoc in the world the safer world will be and the safer you know especially Europe will be with just a little bit of

insight you can see why so many people would like us to engage in a little bit of this armament ourselves. Thank you. One thing that I haven't mentioned. How much does that make anybody but your uncle is big. Brzezinski who was President Carter's National Security Advisor when when people in Russia found out who that you were his nephew that they did it effect the way they thought about you and treated you. Oh very much so. And I guess I guess growing up in an household where oh where the Russians were not always very popular because we were political refugees this is how we ended up in this part of the world that the Stalin invaded Poland and we all had to flee. It clearly colors colors your perception of the country and of course it makes you makes you more or less trustworthy than you would otherwise be. But you know on the on the other hand the

Russians to this day if you ask them you know the name sort of that the most fearsome anti-Soviet politicians and statesmen in the United States they will they will single out my uncle and I don't want to occasions I you know I was confronted with people say well we shouldn't we shouldn't blame the sons for the sins of their fathers. And and sometimes you know their view would be particularly when when going outside of Moscow into the provinces where we're mentalities where you know hadn't been changed as much as you would encounter hostility very much so. Let's go to one of the caller this is Chicago. Line number four. Hello. Speaking of blaming for the sins of things that are to establish the law and contract and other banking systems the team from Harvard went to Russia as I understand and seemingly got themselves into trouble to write a business putting their fingers into the pie and consequently understand they were fined for having done so. Had

you heard about that engine. Oh yes very much we were. The journals one of the one of the papers that broke that story. You know that thing about Russia is is that when going there sometimes you'd end up in a moral vacuum and it was a very very very seductive place and sometimes you would you wouldn't even feel yourself slipping and but you would be eventually going native and one of the. The ironies is that we went there thinking that if we do business with them and show how business is done they're going to become more like us. But what more often was happening for four Western business nine is that we were adopting the local rules and start to act more like family. I think this may be the case with with some of the professors from Harvard who got themselves mixed up with all sorts of conflicts of interest that they would have never dreamed of doing over here just because over there everybody was doing it and that was par for the course. Yes but another question arises since we are going through

the questions of a monopoly here and there are certain groups over there is that where you might say in the area of distribution and when those wells exercise a monopoly via their power and force and Sue. These groups as you mentioned there if you know anything anything from alcohol and say alcohol and cigarette distribution is is an area of it that is controlled by the mob. And even not even Philip Morris the maker of Marlboro will dream of getting into into that area and the few times that they thought about it they receive kidnapping of the ex-pats their executives in Moscow receive kidnapping threats some of their their their very there was bombs set off at some of their some of their businesses and they all stay away from it. You know when it goes the same thing with with the export of many of the steel products and aluminum This is also controlled by virtual monopolies which operate just like organized crime and and kill people and there's been a case of when an American company was based out of New York they were traders and they were called

a IOC if memory serves me correctly decided to try to get into that business and its representative in Moscow was making actually inroads and he disappeared between passport control and the boarding gate of the Delta flight and starting with a local flight and his body was found 60 miles a couple of days later his body was found riddled with bullets 60 miles outside of outside of Moscow and the American company obviously withdrew from from Russia and that the monopolies you know go right to choose for the huge huge companies. Cause problem which controls it's the it's the world's largest natural gas provider I think it that sits on just about half of the world's natural gas reserves and they have a monopoly on the pipelines on on everything and they are a state within a state. They contribute something like as much as a quarter or a fifth of Russia's federal budget. And President Putin has just put his own man in there. But you know previously it had been run by by Viktor Chernomyrdin who was the prime minister.

And then and then his protege got out of and you know these the monopolies in Russia are on reforms and extremely wasteful. And it's one of the reasons why ironically Russians sometimes will pay more for energy in Russia even though they have so much of it than than we do in the United States. It's overwhelming. Thank you very much. Well thanks for the call and do we have about 10 minutes left in this part of focus 580 We're talking with Matthew Brzezinski. He is now a freelance writer. His work has most recently appeared in The New York Times Magazine between 1996 and eight. He was a staff writer for The Wall Street Journal in Kiev and Moscow and before that reported from Poland and other countries in Eastern Europe for a variety of publications including The New York Times The Economist The Guardian The Toronto Globe and Mail his book if you'd like to read it is titled casino Moscow a

tale of greed added. Sure on capitalisms wildest frontier it's published by the Free Press. Questions are welcome. 3 3 3 9 4 5 5 toll free 800 to 2 2 9 4 if I thought you were just talking about the difficulties that American business people faced when this economy opened up and here was this great they thought he was this great opportunity to make investments and do business on the ballot in a top market massive and to India and the difficulties that they found when they got there and got on the ground and saw the rules by which things were played despite that given that were there some American business people who'd also managed to get rich. Oh Has Russia particularly people in there who have been sent there by Wall Street. In between 96 to 98 the Russian experience was something very similar to the dotcom bubble where through. Hype and hope I suppose.

People got started playing the Russian stock market and the Russian stock market Worlds was down I believe 1997 or maybe 96 and 97 was the world's you know best performing stock market. Government bonds which were which were a novelty for the Russians were paying 200 percent. And so when that when some investors from from the U.S. took that took a gamble on this and realized that within you know within within 90 days because these were 90 day treasury bills you could make as much money in Russia as you could sitting on on on U.S. bonds Treasury Treasury bills for four decades. You had a bit of a Klondike that was born and you had tens and tens if not hundreds of billions of dollars that started flowing into the stock markets and it was it was it was a very interesting marriage between Russian gangsters and wall street greed. And you know not surprisingly I suppose in hindsight it led to the

end the biggest you know a bust in international financial history and in August of 1998 when essentially what what transpired was was all these bond these stocks and bonds turned out to be Ponzi schemes and Western investors lost probably close to 100 billion dollars. And in Russia we have color here on a cell phone we'll get right to them. Number four a lot thank you very much. I have a two part question and I'll ask the question and then hang up and listen for the answer on the air. The two part question is is this in your opinion. First is capitalism irreparably damaged in the in the former Soviet Union. And if it isn't then what's the best hope for capitalism there. To answer your question yes capitalism is irreparably damaged and in the former Soviet Union. You know in the New Rich circles of Moscow and St. Petersburg they're all for it. The sort of capitalism that they practice. But if you go

outside 20 miles outside of Moscow you've entered the deep third world where where where people are getting by on on on bartering on subsistence living where people. Probably wouldn't be able to eat if they didn't have these garden plots where they find it tomatoes or potatoes or cucumbers or what not and for them what they think is capitalism which was sort of the Russian wild wild wild West version. Is is a dirty word and cheering cheering the comments as as one person once told me during communism you know the government always told us capitalism was evil and it took the fall of the collapse of communism for real for me to realize that the Politburo had been right all along. This is just because of the sort of capitalism that was practiced in and it is has nothing to do with the sort of you know free market economies that we have here in the West. No possibility of. Pair or yeah it takes a long time.

I think it's I think it's a generational question for for those people who spent most of their lives under the Soviet system. For all its faults the average Russian lived better before 1991. They had basic services they had salaries they had food on their tables they could walk the streets at night. And for them this was a shock and a horror and for them they for them freedom and the free market is is chaos and banditry. Now what you have the hope that you have is that there's a very young generation of people who are today in their 20s and people who are going abroad a lot and of all the of all the aid programs of all the tens and tens of billions of dollars that U.S. taxpayers something to Russia. I think one of the most effective was was a sort of student exchange programs where we brought in young Russians to spend a

semester or a year studying in the United States so they could walk the streets and go to the shops and see that the system can't work. And it's I think for me it's those young kids that are that when they grow up they're the only hope for that for that country. Another cell phone. Here line 1. Hello. Oh yes. Wanted to ask you started the topic on the food plots but what's happening in the main agricultural enterprises. Well ironically enough agriculture really has not been reformed in Russia for most of the Soviet Union in fact the the old collective farms which were you know just about the most inefficient form of of Agriculture ever invented. They all are still around. And with rare exceptions there are there is no private farming in Russia. And only recently have they been has has the Tomb of the park the Russian parliament been making efforts even to make that land land privatization legal. And I've

been to I've been to a number of collective farms and it's a tragedy you often have cross. Rotting in the fields because these collective farms no longer even though they operate in the same way they did before they no longer get the subsidies because of course the Russian government is defectively bankrupt and can't afford to give them the cheap loans that it used to so they can't afford fuel for their combine harvesters or very often they can't bear to have the harvesters of broken down and can't afford to fix them so they end up they end up selling them to neighboring farms for spare parts. And so it's you know crops rot in the field and join the nineties. Agriculture production has plummeted and in Russia and I do it still it's still very much an unreformed sector because the peasants are just they're gotten used to the idea that other people are going to think for them and they're there to fight and in very many cases to all of a sudden make decisions for themselves and all the sudden to work for profit and

they they're very timid and passive bunch it is it is very they're very very much living in the 19th century and the Russian farms. Thank you. Thank you. It seemed at least at various points that there were the people who were doing the. Planning for the Russian government were capable enough and some of them seem to be rather savvy now. Of course also that there was a lot of churning of advisors it seemed that one of things that Mr Yeltsin would do was keep changing his coaches every once in a while. What exactly happened was this a failure of leadership was it that they just rushed into capitalism too quickly was it that that any individual was never really given the time and support to implement his his ideas. I think I think ultimately it was a failure of leadership. I mean this Yeltsin was the

captain of the ship and the ship sank under his watch. And what I was a great admirer of Yeltsin until I got to two to Russia. I think what his what he did in 1991 when when he very heroically stood up on that tank and he became sort of a symbol of hope in Russia. What was incredible and will go down and no question not in the history books. However Yeltsin. Mission got the best part of Yeltsin and by by 1990 by 1996 when he was up for re-election it was clear that his health was failing him. It was also clear that he was extremely unpopular and he should have walked away and retired but he didn't he made him a deal with the devil which in this case were 7 very powerful banker types businessmen who were who became known as the oligarchs and they controlled much of the sort of newly privatized media. And they made a deal they said we'll

put you back in office and you give us the keys to the Treasury. And the election of one thousand ninety six was was it a giant scandal. We we in the West sort of sort of chose to look away because it's easy that they have a candidate to Yeltsin was running against was it was a communist and so we figured well you know let there be some of you voting irregularities as long as Yeltsin gets back and the problem is once Yeltsin got back in he essentially spent the better part of a second term. Sanitariums convalescing and he was sick and there was nobody minding the shop and. So the oligarchs professionally ran the place and they say they raped and pillaged the country. That billions tens and tens of billions of dollars were siphoned out through the sale of natural resources no money was reinvested and the

government often of the government's money or aid from from Western organizations like the World Bank simply disappeared. And the these very the young reformers that we counted on so much were very many of them effectively were in the pockets of the oligarchs at which time we we either didn't know this or ordered or chose not to know this. In retrospect if it would it seems as if it was so obvious and why didn't we see this but this is always the case. So you know so so I blame Yeltsin and then of course. And in 1909 when the when the when after the crash when when when freedom in the free market were sort of dirty words and then there started to be some sort of crumbling in Moscow that perhaps Yeltsin should be prosecuted for some of this corruption. He started to look changing prime ministers almost on a monthly basis looking for somebody who would be tough enough to protect him and his family and of course he found that in the former

and former KGB agents in the former head of the of the FSB is the KGB is not called so by name of like America put it and put They made a deal that you know we will take care of you just hand over power. And that's I think I think Yeltsin sold the country down the river in 1996 and then he sold what was left of it in exchange for his own personal safety and the Internet and I mean so I hold him responsible. Well we're going to have to stop because we've used our time to have somebody here I can take my apologies but we're just going to have to finish. WILLACY Mr. Brzezinski thanks very much for talking with. Oh it's been my pleasure. Our guest Matthew Brzezinski he is now a freelance writer a former staff writer for The Wall Street Journal and the book if you would like to read the book we've talked about is Casino Moscow a tale of greed and adventure on capitalism as well this frontier. The book is published by the Free Press.